Why Caxton Never Called

Author:
Publish date:

This post isn’t about some of the biggest hedge funds in the world losing a ton of money in August because they were under the impression that bad things (losses, Spiderman 3, 9/11, Britney Spears’s performance at the VMAs) only happen to poor people and little hedge funds. Not entirely, anyway. It’s also about honesty, even in the face of embarrassment, and failure and a little bit of extortion. But first, the losses.
Last month—apparently it wasn’t so good for a few members of the hedge fund elite. And “wasn’t so good” ranges from “I’m not crying, I told you I just have something in my eye” to “some days even my lucky rocketship underpants don't help.” Paul Tudor Jones’s Tudor BVI Global fell 5.5%, leaving the fund down 1.5% for the year. His Raptor, not feeling the rapture, was down 5.6% for the month and 9% for the year. Meanwhile, Matthew Tewksbury’s $3 billion fund dropped 8% to wipe out half of this year’s gains, which probably would’ve been less embarrassing for MT, had he not renamed the fund after himself (and printed up letterhead with his likeness at the top), following the purchase of Monroe Trout’s business. Moore Capital’s Global and Fixed Income fund were down 5.7% and 4.3%, respectively, with Third Point falling 8.3% for the month, leaving it up 6.8 per cent for the year.
But what do these losses really mean (besides extra page views for us)? A couple dollars, here, a couple dollars there? Sure, Loeb couldn’t get out of bed for about a week, but that’s just because Loeb is a very sensitive person, and beats himself—and not others—up over the tiniest little things. What we want to talk about is the good news from the Caxton Associates camp. Okay, Caxton’s $11 billion flagship fund was down 4.8% in August. Okay, this means a loss of 1.5% for the year. Okay, Bruce Kovner got rejected from an ATM just this morning.
But on August 16th, we published a list of hedge funds rumored to be "not doing so well," "experiencing losses," or "maybe blowing up," and Caxton was on it. We challenged the funds to call and prove us wrong, and said that if they did, they would be crossed off. Many of them did. For instance, an individual from Chicago got in touch and informed DB that things were A-okay with Citadel commodities, which is why a line was run through “Citadel commodities.” But no one from Caxton called. And now we know that it’s because they were down, and decided they didn’t want to lie to us. And we take that as a positive sign for humanity. A hedge fund telling the truth (or not telling a lie). We get that Bruce may not see it this way—it is kind of like saying, “At least you’ve got your health.” But that's just us. At DealBreaker, we like to look on the bright side. And if anyone's heard anything about the fact that SAC was rumored to be down 9% in August, please let us know.
Earlier: Prove Us Wrong
Hedge funds suffer August losses [FT]

Related